Mercedes Chief Predicts Market, Brand Growth

Mercedes’ volume will be helped by new product this year, including a revamped R-Class and diesel and convertible E-Class models. Through May, Mercedes sales were up 25.8% over like-2009.

NEW YORK – Driven by new product introductions, especially the all-new E-Class, Mercedes-Benz USA LLC sales have soared 25% over last year, says Ernst Lieb, the importer’s president.

“We’re not at the 2008 level yet, but business is improving dramatically,” he says. Lieb is relieved Mercedes has weathered 2009, which he terms one of the worst ever for the industry, and clearly is headed upward.

“The luxury segment overall is up a little over the rest of the market,” Lieb says. But he doesn’t expect the elite sector to come back quicker than the rest of the automotive market.

He says the U.S. market currently is on pace to sell 11.6 million light vehicles, and that by year-end, deliveries should reach about 11.8 million.

Through May, Mercedes sold 87,970 light vehicles, up 25.8% from like 2009. Mercedes’ volume will be helped by additional introductions later this year, which include a revamped R-Class, a diesel E-Class and an E-Class convertible. There will be minor changes in other products as well, Lieb promises.

The flagship Maybach is in no danger of being dropped in this market, he says, noting eight units were sold last month, five more than in May 2009. There's a Maybach facelift coming in the fall, and Lieb believes that will help revive interest in the super-luxury model.

“There’s a good chance we’ll have a pretty good year,” he says. He attributes much of this to the torrid pace of dealership renovations. A vast majority of Mercedes dealers have invested $1.3 billion in facility upgrades. “Hats off to our dealers,” he says. However, 70 Mercedes retailers have failed to participate in the program.

In consultation with his dealer council, Lieb says the non-compliant dealers will be punished in some fashion – probably by taking away their volume bonuses.

“We have to support the 270 dealers who did (improve their facilities) or are doing it,” he says. “The remaining dealers shouldn’t get the same compensation opportunities, according to our dealer council.”

Lieb is considering appropriate sanctions. “It’s something we’re looking at.” But they won’t include cutting back on deliveries of hot-selling models. “That would only penalize our customers,” he says.

The auto maker’s bottom line also will be helped by the plummeting euro, Lieb says. “But it will take time for the devalued euro to help us with our imported units.”

Mercedes will lose some “natural hedging” because it exports vehicles produced at its Tuscaloosa, AL, plant.

Lieb says it’s too early to conclude the automotive recession is ending, but he’s encouraged by results so far.

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